PARIS – The French government was under fire Sunday over its attempts to hike taxes, with the ruling Socialists forced to back down on one tax plan and facing violent protests over another.
Under pressure from the European Union to rein in the state deficit, President Francois Hollande’s government has announced about €3 billion ($4.1 billion) in tax increases for next year.
In the latest setback, the government announced Sunday it is dropping plans to increase taxes on popular savings programs. The plans would have harmonized tax rates on interest from several kinds of savings plans at 15.5 percent, raising an extra €600 million ($830 million) in revenues. In some cases the increases would have been retroactive on earnings from interest dating back to 1997.
In Brittany, about 1,000 protesters clashed with police Saturday as they attempted to destroy a metal toll gate near the town of Pont-de-Buis in protest over an “eco-tax” due to take effect Jan. 1. The tax, aimed at encouraging environmentally friendly commercial transport, imposes new levies on French and foreign vehicles transporting commercial goods weighing more than 3.5 tons. Critics say the tax will seriously damage Brittany’s farming and food sectors by increasing transportation costs.